Category: IRS Extension

Only U.S. citizens or resident aliens who were out of the country on April 18 can file a tax extension after the April 18, 2016 deadline. The extension must be filed on or before June 15.

Who can get a tax extension being out of the country?

“Out of the country” means:

The taxpayer lives outside the U.S. or Puerto Rico, and their main place of business or post of duty is also outside the U.S. or Puerto Rico; or

The taxpayer is on-duty in the military or naval service outside the U.S. or Puerto Rico.

Out-of-country taxpayers have through June 15 to file their taxes and pay additional taxes owed. However, the IRS starts charging interest on any unpaid taxes still outstanding after April 18, regardless of where the taxpayer is located.

The Internal Revenue Service (IRS) today reminds taxpayers who can not file a tax return on time that it is very easy to file an extension. In fact, you can file an IRS extension online very easily. These tips are designed to help you navigate common tax problems while approaching the deadline for the April 15.

For taxpayers who have not filed your taxes, the IRS has this advice: do not panic. Taxpayers who need more time to complete your tax return may request an automatic extension of six months. The fastest and easiest way to get this extension is through the link IRS Free File on IRS.gov. Within seconds, anyone, regardless of income, you can use this free service to request an extension electronically on Form 4868.

Using IRS FreeFile for Tax Extension

Fill out this form allows taxpayers to file a tax return until October 15. To receive this extension, taxpayers must estimate your tax liability on this form and must pay any amounts due.

The IRS warns taxpayers that asking for an extension will provide more time to file a tax return and no longer to pay the taxes due. Introducing a normal tax return or request an extension before the deadline of April 15, taxpayers will avoid the penalty for filing late. Taxpayers should file a return even if they can not pay the full amount of taxes owed.

The penalty for filing a late, usually five percent per month based on the balance of taxes have not been paid, applies to returns filed after the deadline of April 15. In addition, any payments made with the extension request will reduce or eliminate interest and penalties on late payments, that apply to payments made after April 15. This rate is three percent per year, accrued daily, and a late payment penalty is normally 0.5 percent per month.

Automatic Tax Filing Extensions with IRS FreeFile

Besides Free File, taxpayers can choose an extension through a paid tax preparer, using preparatory program business tax or file a paper Form 4868 available IRS.gov. Some taxpayers can wait longer without having to ask for an extension.

More Information about Tax Extensions

Taxpayers abroad . US citizens and residents who live and work abroad, as well as members of the army outside the US, have until June 15 to file. Tax payments still to be made ​​by the deadline of April 15. Members serving in Afghanistan and other military combat zones .

Tax Extensions and Combat Zones

Typically, taxpayers can wait until 180 days after leaving the combat zone to file a tax return and pay the taxes due. For details, see Publication 3 , Extensions of Deadlines, Tax Guide of the Armed Forces. People affected by certain recent natural disasters which the IRS outlines as eligible for tax extensions and no penalty.

Interest on underpayments of tax is imposed at the federal short-term rate plus three percentage points The interest rates, which are adjusted quarterly, are determined during the first month of a calendar quarter and become effective for the following quarter. Currently, in 2015 and 2016, the interest rates remain very low and paying interest on tax payments will be of minor consequence to many taxpayers.

Interest Accruing on Tax Payments

Interest accrues from the date the payment was due, determined without regard to any extensions of time, until it is received by the IRS, although no underpayment interest accrues for failure to timely pay individual or corporate estimated tax. Interest is compounded daily. For all four quarters of 2014, the interest rate on underpayments is three percent.

Who is liable for interest on unpaid taxes?

If a carryback of a net operating loss, net capital loss, or other credit carryback eliminates or reduces a deficiency otherwise due for such earlier year, the taxpayer remains liable for interest on unpaid income taxes (including deficiencies later assessed by the IRS) for the carryback year. The entire amount of the deficiency will be subject to interest from the last date prescribed for payment of the income tax of the carryback year up to the due date (excluding extensions) for filing the return for the tax year in which the loss or credit occurred

Overlapping Overpayments and Underpayments

The interest rates for overpayments and underpayments have been equalized for any period of mutual indebtedness between taxpayers and the IRS

Abatement of Interest. The IRS has the authority to abate interest in cases where the additional interest was caused by IRS errors or delays. However, the IRS may act only if there was an error or delay in performing either a ministerial act or a managerial act, including loss of records by the IRS, transfers of IRS personnel, extended illness, extended personnel training, or extended leave, and only if the abatement relates to a tax of the type for which a notice of deficiency is required.

What type of taxes are affected?

These taxes would be those relating to income, generation-skipping transfers, estate, gift, and certain excise taxes, but not employment taxes or other excise taxes. Taxpayers requesting an abatement of interest generally must file a separate Form 843 for each tax period for each type of tax with the IRS Service Center where their tax return was filed or, if unknown, with the Service Center where their most recent tax return was filed.

Suspension of Interest

In order to avoid the accrual of underpayment interest, a taxpayer may make a cash deposit with the IRS for future application against an underpayment of income, gift, estate, generation-skipping, or certain excise taxes that have not been assessed at the time of the deposit. To the extent that a deposit is used by the IRS to pay a tax liability, the tax is treated as paid when the deposit is made, and no interest underpayment is imposed. Furthermore, if the dispute is resolved in favor of the taxpayer or the taxpayer withdraws the deposited money before resolution of the dispute, interest is payable on the deposit at the federal short-term rate.

The number of electronic filing and payment options increases every year, which helps reduce your burden and also improves the timeliness and accuracy of tax returns. When it comes to filing your tax return, however, the law provides that the IRS can assess a penalty if you failure to file taxes, failure to pay taxes or both.

Here are eight important points about the two different penalties you may face for failure to file taxes or failure to pay taxes.

If you do not file by the deadline, you might face a failure-to-file penalty. If you do not pay by the due date, you could face a failure-to-pay penalty.

The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return on time and pay as much as you can, then explore other payment options. The IRS will work with you.

The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of your unpaid taxes.

If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.

If you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes.

If you request an extension of time to file by the tax deadline and you paid at least 90 percent of your actual tax liability by the original due date, you will not face a failure-to-pay penalty if the remaining balance is paid by the extended due date.

If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.

You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect.

Can’t make the April 18 tax filing deadline and need more time to file your tax return? You can get an automatic six month extension of time to file from the IRS.

Here are seven important things you need to know about filing an extension:

File on time even if you can’t pay If your return is completed but you are unable to pay the full amount of tax due, do not request an extension. File your return on time and pay as much as you can. The IRS will send you a bill or notice for the balance due. To apply online for a payment agreement, go to the IRS website at http://www.irs.gov and click “Apply for an Online Payment Agreement (OPA)” at the left side of the home page under Online Services. If you are unable to make payments, call the IRS at 800-829-1040 to discuss your options.

Extra time to file An extension will give you extra time to get your paperwork to the IRS, but it does not extend the time you have to pay any tax due. You will owe interest on any amount not paid by the April 18 deadline, plus you may owe penalties.

Form to file Request an extension to file by submitting Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, to the IRS by April 18, 2011, or make an extension-related electronic credit card payment. For more information about extension-related credit card payments, see Form 4868.

E-file extension You can e-file an extension request using tax preparation software with your own computer or by going to a tax preparer who has the software. The IRS will acknowledge receipt of the extension request if you file by computer.

Electronic funds withdrawal If you ask for an extension via computer, you can also choose to pay any expected balance due by authorizing an electronic funds withdrawal from a checking or savings account. You will need the appropriate bank routing and account numbers. For information about these and other methods of payment, visit the IRS website at http://www.irs.gov or call 800-TAX-1040 (800-829-1040).

How to get forms Form 4868 is available for download from the IRS website or may be ordered by calling 800-TAX-FORM (800-829-3676).You can also obtain the form at your local IRS office. Telephone requests normally take 7 – 15 days to process and ship.

IRS Information on Tax Extensions

Form 4868, Application for Extension of Time to File U.S. Individual Income Tax ReturnForm 9465, Installment Agreement RequestPublication 54, Tax Guide for U.S. Citizens and Resident Aliens AbroadPublication 3, Armed Forces’ Tax Guide

If you can’t meet the April 15 filing deadline to file your tax return, you can get an automatic six month extension of time to file from the IRS.

Need More Time to File Your Taxes? File an Extension!

Filing an extension, when you’re not ready to file your federal return, helps you to avoid a late payment penalty which can add up to 25%* of the income taxes you owe. This substantial penalty, can be avoided by taking a few minutes to file an extension along with your tax liability payment.

There are three ways you can request an automatic extension of time to file a U.S. individual income tax return: (1) you can electronically file Form 4868 (PDF), Application For Automatic Extension of Time To File U.S. Individual Tax Return; (2) you can pay all or part of your estimated income tax due using a credit or debit card or by using the Electronic Federal Tax Payment System (EFTPS); or (3) you can file a paper Form 4868 by mail.

Here is what you need to know about filing a tax extension:

An extension will give you extra time to get your paperwork to the IRS, but it does not extend the time you have to pay any tax due. You will owe interest on any amount not paid by the April 15 deadline, plus a late payment penalty if you have not paid at least 90 percent of your total tax by that date.

If your return is completed but you are unable to pay the full amount of tax due, do not request an extension. File your return on time and pay as much as you can. The IRS will send you a bill or notice for the balance due. To apply online for a payment agreement, go to IRS.gov and use the pull-down menu under “I need to …” and select “Set Up a Payment Plan.” If you are unable to make payments, call the IRS at 800-829-1040 to discuss your payment options.

Request an extension to file by submitting Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, with the IRS by the April 15, 2009, or make an extension-related electronic credit card payment. For more information about extension-related credit card payments, see Form 4868.

You can e-file an extension request using tax preparation software on your own computer or by going to a tax preparer that has the software. The IRS will acknowledge receipt of the extension request if you file by computer.

You can use Free File Fillable Forms to file for an extension. You can access Free File Fillable Forms via the IRS Web site at IRS.gov.

If you ask for an extension via computer, you can also choose to pay any expected balance due by authorizing an electronic funds withdrawal from a checking or savings account. You will need the appropriate bank routing and account numbers and must also have available the adjusted gross income from your 2008 federal income tax return to verify your identity. For information on these and other methods of payment, visit IRS.gov or call 800-TAX-1040 (800-829-1040).

To obtain a copy of Form 4868 or other forms and publications use E-file tax preparation software, download them from IRS.gov or visit your local IRS office. Forms and publications can be ordered by calling 800-TAX-Form (800-829-3676). However, telephone requests normally take 10 days to fill and may not arrive before the tax deadline of April 15.

Extensions serve the purpose to allow taxpayers to gather all their information so they can timely file a complete and accurate return without being assessed a late filing penalty. If you fail to file either a tax extension or return by the appropriate filing deadline (March 17 for businesses and April 15 for individuals), the IRS may charge interest on any unpaid Federal taxes, as well as impose a failure-to-file penalty. The interest compounds daily and the rate is currently the Federal short-term rate plus 3%. If you do not file and you owe tax, the failure-to-file penalty is 5% per month (up to 5 months) of the unpaid tax. If your tax return is more than 60 days late, you may be subject to a minimum penalty of $135. The IRS will also impose a failure-to-pay penalty of 0.5% per month (up to 25%) of the tax owed if you file a return or extension but don’t pay all your taxes on time.

You can also go to Filing Information in Publication 17, Your Federal Income Tax (HTML page), for more information regarding the rules for automatic extensions and filing federal individual income tax returns.

Extensions for Corporations, Partnerships, REMICs, and Certain Trusts

Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns

Form 1138, Extension of Time for Payment of Taxes by a Corporation Expecting a Net Operating Loss Carryback